US retailer L Brands has agreed to transfer full ownership and operations of its Canadian-headquartered La Senza lingerie brand to a Regent LP affiliate.
Upon completion, the private equity investor will assume La Senza’s debts and all future considerations for the brand. The deal is part of L Brands’ efforts to focus on its core brands as its flagship label Victoria’s Secret faces challenging shifts in the market.
L Brands this year closed down its heritage women’s apparel line Henri Bendel after 123 years of trading. The sale of both Henri Bendel and La Senza is expected to encourage investors concerned about Victoria’s Secret’s declining performance as direct-to-consumer startups and the emerging success of rival label Aerie threaten the brand’s market supremacy.
L Brands expects this year’s sales for La Senza will hit around $250 million with operating losses of about $40 million.
La Senza was founded in 2006 and at its peak in 2010 had some 800 stores worldwide, 320 of them in Canada. But by 2013 the business was in decline, under competitive pressures from rival brands including Victoria’s Secret. By January last year, the store network had contracted to just 329, including 122 in Canada and four in the US.
In 2011 a separate company La Senza UK, which held the franchise to the brand in the UK and Ireland, was placed in administration and later acquired by Kuwait-based Alshaya, but despite a further change of ownership, that business was placed in administration again in 2014.
Other stores using the brand around the world are operating under a franchise agreement.